Day Trading or Position Trading?

as a position trader,u need to understand the fundamentals,i mean reading the markets and news feed,also you have to master money management skills to keep you in a comfort zone…
you can check this site for lessons from an experienced position trader-pipeasy http : / / w w w . forexfactory . c o m /showthread.php?t=245149

I am trying to move from day trading to position trading.

Day trading has its drawbacks.

One of the major issue is entering a few positions a day.

The second part is not holding for the maximum pip potential of a trade. Most of the time, I realise my TP is 40 to 50% of the entire move. There are times where I cut of with 20% of what it actually gave. This tends to interfere with my risk and also my Risk to Reward ratio.

I tend to rush into signals at times also. This is not very good when the SL is on the immediate LL.

I am working on progressing to taking and holding trades for longer periods of time.

I am planning to draw another MM chart to support the current one and start with 100 dollars as capital risked. This way I think I wont be changing anything to drastic, at the same time, try to swing trade on the same account.

Position trading requires long stops and big capital but has less headache.Day trading involves higher risk and lot of uncertainity.Personally,I am a swing trader and it suits me really.

I love that kind of headache :7:

In my opinion, neither position trading or day trading is suitable for beginners. As has already been mentioned, position trading requires a lot more capital, and you need a greater understanding of fundamentals. Day trading is too fast for a beginner, and plus it is not practical if you have a full-time job.

Swing trading is a much better starting point for beginners. It is 100% technical analysis (), and you are trading in the direction of the trend. You are trading higher time frames which are more reliable, and you will be taking higher probability trades. You will need more capital to start with than for day trading, but a lot less than for position trading.

My experience in FX has told me that short term day trading is probably the toughest place to succeed in, you have to really be selective and know your setups very well. Also, once volatility shrinks its very tough to eek out a respectable profit. I was doing pretty well when the Vix was in the 40’s, then once it shrank at the beginning of this year I was totally lost, the market was just indecipherable.

A professional FX trader told me that short term scalping style strategies are very difficult to sustain these days because of all the competition from the algorithmic trading crowd. You have accomplished PhDs in math, top programmers, and experienced traders that team together and compete against you. They see things in the market that you can’t see on the chart (for example, they can compare multiple markets in a heartbeat and use sophisticated math equations to determine price relationships).

While quants compete on all time frames, the playing field is more even on longer term moves because at that point, they really can’t beat you on speed for analysis. If you get in 3 pips higher than they it won’t make a big difference if you’re both going for a 50 pip move (and they have higher fixed costs to cover).

I run a balance between the two. My day trades literally last me 24 hours or less if I hit my desired profit sooner than anticipated. The other trades I carry just to make interest off of. I use roughly the same units in my day trading trades as I so in my long term carry trades. Without my carry trades I wouldn’t know how to place my day trades. Lol

I do not understand why position trading or swing trading needs more capital. Adjust your position size according to your capital. I am a position trader and swing trader and i do not understand fundamentals at all and I donot enter a trade based on fundamentals.

Each to their own.

The best way I can explain this is with an example:

  1. trading capital is 1,000
  2. 1% of capital risked per trade i.e. $10 per trade
  3. value per pip is $1
  4. stop loss is 50 pips = $50
  5. therefore, higher minimum capital required

I’ll use your example:

  1. trading capital is 1,000
  2. 1% of capital risked per trade i.e. $10 per trade
  3. When stop loss is 50 pips, the loss should be $10 only
  4. Your position size should be two micro lots ($0.20 cents per pip) = 50 pips x 0.20 = $10 dollar loss
  5. Conclusion, no need for higher capital requirement, what people need is PATIENCE to grow their capital.

Hi All,

I preferred Positioning trading, reason to this is that, it really cut’s out the stress in me. I have done scalping over the past years, and believe me, over a long period of time, it takes the patient out of you, unless if you really have the time, by all means why not. But after my experience of that, I now preferred Positioning Trading, simply because, yes, you can make more pips over a couple of days if you anticipate the entry and exit right. As for the difference between scalping and positioning trading, what I can see is that, from daily you will know whether if the movement is making it’s big or small movement or not, otherwise, it will be a challenge to just take out small pips to have the patient in scalping. Right now, I’m still working to improve on positioning, so far it’s good, not hoping to get better and better at it, each time, when the chance is right there.

Position trading requires wider stops so you have to adjust your position size accordingly to minimize your risk which decreases the pip value.

these both are are really interactives. but i think day trading have more benefits and it for such longer time period. through it you can get high benefits and returns. it is such a successful technique and strategy at forex market.

Position Trading by far. The trades are further apart, giving forgiveness to Newer Traders. And the wins are big.

True but how far can patience be tested,
I have done what you say with position sizing,
It gets disheartening after you have a couple of hundred pip move for a few dollars profit to keep RR OK.
So a bigger start out capital helps the emotional side of things.
At least profit looks better even if it is the same percent wise.
That keeps you trading to the plan!!!

first, i disagree that “trading xxxx style requires more capital that trading yyyy style”. no matter what you trade and how long you keep your trade, you have to adjust your position size accordingly. the shorter your expected trade duration the larger the position you can take given the same balance. you shouldn’t be looking to earn PIPS, you should be looking to earn PERCENT INCREASE IN EQUITY. on short term, you need to make that happen with 20-50 pips so each pip has to be worth X. on long term, you need to make that same gain happen with 100-300 pips, so each pip has to be worth Y (which is less than X).

having said all that - pick the style that matches your own personality. if you’re an impatient mofo, swings are gonna drive you bonkers. if you’re very analytical, scalping / momentum is gonna freak you out.

personally, i’m more in the scalp / momentum / day trade camp. my trades last anywhere from a few minutes up to 3hrs (that’s a loooong trade for me). typically my “personality comfort zone” is between 5min and 30min. yours might be 5~30 DAYS.

A perfect answer in my opinion.My comfort zone is 30min-2days.

I totally agree with everything you said, but disagree whole heartedly with your disagreement!!! :wink:
Isn’t Forex wonderful,that 2 people can share the exact same thought on one thing but see it in a
totally different way!

As I said earlier I think the difference is the emotional one, not the technical one with a small starting
balance (as a position trader) I myself don’t trade position, but gave it ago with a small balance when i was just starting out
Trading.

We need to agree to disagree or this may go on for some time!

I think anytime the question of Daytrading or Position Swing Trading is posed, there will always be a disagreement.

To me, this is like asking someone Democrat or Republican, which party is the best, and then invite 20 people to the room. Watch what happens ;D

Position and Day Trading are completely night and day in technique, thought process, and trade process.

I prefer Position, and no I will not tell you Dem or Rep :slight_smile:

:57: Great insight, Tony.
Scalping can be amazing and provides instant results, but my stats tell me it is not working for me.
Trading the news works better for scalping.
Planned trades take more time and offer more insights in the long run.